NutriSystem CEO Dawn Zier: Clinton Group recently upgraded its position in NutriSystem Inc. (NASDAQ:NTRI), currently owning 5.2% of the company, which is equivalent to some 1.5 million shares, versus the previously owned amount of 1.4 million shares, a filing with the SEC revealed. At the same time, the shareholder sent a letter to NutriSystem’s CEO, expressing their positive attitude towards company’s activity and some ideas to boost shareholder value.
NutriSystem is a company specialized in the production of weight management systems. According to the letter sent by Clinton to the company’s CEO Dawn M. Zier, the investor considers that the company can reach the $106 million EBITDA by 2016, which was the average amount during the 2006-2010 period. The adjusted EBITDA of NutriSystem last year totalled $27.3 million.
“With the free cash generated over the next two years (which Citigroup Research estimates at $25 million after dividend payments), plus the existing cash on the balance sheet ($35 million), this implies a stock price in the mid $30s by Fall 2015. Such a stock price would be approximately equal to the average price from 2006 to 2010 and significantly below the stock’s pre-recession peak of $75. For today’s owners, a mid $30s price by the Fall of 2015 implies an annualized return of over 50%.,” the letter also said.
Aside from Clinton Group, Renaissance Technologies, managed by Jim Simons, disclosed ownership of almost 2.1 million shares of NutriSystem. Coatue Management, managed by Philippe Laffont, and Chuck Royce’s Royce & Associates, held 634,900 shares and 355,800 shares respectively.
Here’s the full letter: